MBN USA

August 16, 2024

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HBEs play crucial role in driving U.S. growth, job creation

Hispanic entrepreneurs are starting businesses faster than any other group, with Latino-owned businesses accounting for 36% of new business launches in 2023, according to U.S. Census Bureau data. That growth is expected to continue, with JPMorganChase projecting that Latino entrepreneurs will make up 20% of the population by 2050, nearly double the 17% they represent today.

MBN USA recently caught up with Ramiro A. Cavazos, president and CEO of the United States Hispanic Chamber of Commerce (USHCC), to discuss the state of Hispanic business, opportunities for Latino entrepreneurs and more.

Q: How are Hispanic-owned businesses faring in the supply chain?

A: Hispanic-owned businesses are making significant strides within the supply chain, demonstrating resilience and adaptability. They are increasingly leading in various sectors, including manufacturing, energy, construction, banking and technology. Since the COVID-19 pandemic, Hispanic business owners have not only revitalized the American economy by enhancing the diversity and competitiveness of the supply chain but have strengthened their own presence nationally. The USHCC continues to support this growth as the premier resource for Hispanic- and minority-owned businesses with our focus area of capital, capacity building and connections.

Q: What are some successes Hispanic businesses have had over the last year?

A: There are more than 5 million Hispanic-owned business, that — combined — contribute more than $800 billion to the American economy annually. Over the past year, Hispanic businesses have achieved remarkable success in several areas, including scaling, building customer bases, and securing grants and contracts. Many have embraced digital transformation, such as Artificial Intelligence (AI), enabling them to reach broader markets and improve operational efficiency. We have also seen a notable increase of Hispanic business owners, reflecting the strong entrepreneurial spirit within the Hispanic business community. We see this growth through the powerful impact to the Latino GDP [gross domestic product], which increased to $3.2 trillion in 2023. Overall, Hispanic businesses continue to contribute significantly to job creation and economic growth in their communities.

Q: In April, Forbes published an article about the growth of Hispanic businesses, which noted how quickly those businesses are growing and the expectations for continued growth. What factors are contributing to that growth rate for Hispanic businesses?

A: Several factors contribute to the impressive growth rate of Hispanic businesses. The Hispanic population in the U.S. is young and rapidly growing, providing a robust customer base and a dynamic workforce. There is also a strong entrepreneurial culture within the Hispanic community, driven by innovation and hard work. Access to better education, technical assistance and mentorship programs has also played a crucial role, equipping Hispanic entrepreneurs with the skills needed to succeed.

Plus, increased support from organizations like the USHCC and local chambers, which advocate for policies and provide resources to Hispanic businesses, has been instrumental in their growth. The number of Latino-owned businesses is growing 10 times faster than White-owned businesses (57% vs 5%), however the odds of loan approval from national banks are 60% lower for Latino-owned businesses, according to the Latino Business Action Network.

McKinsey & Company reports that if Latinos’ share of employer business ownership reached parity with their share of the population, some 735,000 new enterprises could be added to the U.S. economy, supporting 6.6 million new jobs. And if the per-firm sales of those businesses were in line with those of non-Latino White-owned businesses, an additional $2.3 trillion in total revenue could be generated.

Q: How have Hispanic businesses been impacted by the anti-DEI measures that several states and the federal government have enacted in recent years?

A: Anti-DEI measures have created significant challenges for Hispanic businesses to ensure their seat at the corporate tables across America. So far, we have witnessed a decline in essential resources, networking opportunities and funding that are crucial for minority-owned businesses to continue growing the American economy. The USHCC continues to advocate for policies that support inclusive and thoughtful initiatives, because we know minority-owned businesses are drivers of innovation and economic growth. It’s also important to recognize the $3.2 trillion GDP contribution of U.S. Latinos. Inclusive business is good business.

Q: What challenges are Hispanic businesses currently facing and how is the USHCC helping to address those?

A: Hispanic businesses face several challenges, including access to capital, procurement opportunities, connections to viable networks and the need for digital transformation. The USHCC provides advocacy at the federal and state levels to influence policies that support Hispanic businesses to ensure these opportunities are top of mind for our legislators. We also offer educational programs, accelerator programs and procurement matchmaking at the national and even international level. Our procurement initiatives connect Hispanic businesses with larger corporations and government contracts, expanding their market opportunities.

Q: What are some current opportunities for Hispanic businesses and how is USHCC helping businesses take advantage of those?

A: There are numerous opportunities for Hispanic businesses, particularly in technology, health care, energy and e-commerce. The USHCC helps businesses capitalize on these opportunities by offering industry-specific training, networking events and partnerships with key industry players through our various corporate advisory boards. We also provide access to market research and data through multiple national sources that can help businesses make informed decisions and identify emerging trends. By fostering connections and providing these necessary tools, we empower Hispanic businesses to seize these opportunities and achieve sustainable growth.

Q: There’s a lot of focus on AI across many industries. How is USHCC helping Hispanic business owners prepare for and use AI technology?

A: The USHCC recognizes the transformative potential of AI and is committed to helping Hispanic business owners harness its benefits. We offer workshops and training sessions on AI applications, helping businesses understand how to integrate AI into their operations to improve efficiency and innovation. We also collaborate with technology partners to provide access to AI tools and resources. By fostering a culture of innovation and providing the necessary support, we aim to ensure that Hispanic businesses are well-equipped to leverage AI technology.

Q: What’s the outlook for Hispanic businesses throughout the rest of this year and into 2025?

A: The outlook for Hispanic businesses is extremely promising, especially Hispanic-owned businesses that currently represent the largest cohort of entrepreneurs in the U.S. Latinas, for example, are currently opening businesses at six times the national rate. Not only that, but the youngest population in the U.S. is Hispanic. The country’s Hispanic population’s average age was 30 years old in 2020, 11 years younger than the average age of non-Hispanics, according to the US Census Bureau. We expect Hispanic businesses to continue to play a crucial role in driving growth and job creation as they have done for decades. We are confident that Hispanic-owned businesses will continue to thrive and fuel the American economy.

Unity and collaboration within the Hispanic business community is critical. Together, we will overcome challenges and seize opportunities to build a more prosperous future. The USHCC is dedicated to supporting Hispanic businesses every step of the way, providing the resources, advocacy and connections needed for success. We encourage all Hispanic entrepreneurs to engage with the USHCC, participate in our programs and join us in advocating for a more inclusive and equitable business landscape.

To learn more about the USHCC, visit ushcc.com.